A penny for your thoughts…
“Monetization” of the web is the holy grail.
Content is migrating to the web far more rapidly than advertising dollars. As well, newspapers, magazines and TV stations are finite, and the percentage of advertising dollars that these institutions were able to garner was considerable on a per spot basis.
But take 10 percent of the conventional old media spend and spread it over the millions of potential sites on the web, and any amount of money suddenly seems insignificant. Like water poured into the Sahara Desert, one is tempted to ask, ‘where did the revenue go’?
It might seem from first glance that the problem of monetizing the web is fundamentally insoluble. Websites for newspapers or local TV stations will never generate the kind of revenues that physical dailies or local tv stations once did.
That might be right. But it also might not matter.
The web offers not just another platform for distribution of product, but rather an entirely new calculus for how an online media company can be run. By its very nature, it changes the construct of most media businesses. Migrate your newspaper to the web completely and you suddenly lose the cost of ink, paper, presses, pressmen, delivery trucks, distribution and paperboys. Tell your writers to work from home and you can lose the building, the desks, the lights, the cleaning services and most of the management as well.
Cut all those costs, and suddenly your ad based web revenue can look pretty good in comparison.
Its the overhead that is killing you.
Lose it. You don’t need it.
For the past year in Washington, DC, we have been running a small local Television station, but at a tiny fraction of the cost of a conventional station. All reporters are self contained – they cut all their pieces on their own laptops and are free to work at home or in the field. The entire office is one conference room. On site management is almost non-existent. And it works.
The web allows you not only to distribute your product to 2 billion homes daily for free; it also allows you to cut overhead and management to the bone. And what is left behind can go to those who create the content – which seems only fair. The ad revenue might be pennies on the dollar, but after all, isn’t that the percentage of current income that writers or shooters are already taking home?
This is not going to happen overnight, but the seeds of the future are cast within the DNA of the Internet. The new New York Times Building might just prove to be a massive monument to anachronism.